What is the Effect of Operational Managerial Practices on Dairy Farm Efficiency? Some Results from Sweden

The article aims to investigate how operational managerial practices can contribute to improved farm level efficiency at dairy farms. Operational managerial practices are defined as animal health, breeding, and feeding practices. The main contribution of the article is that it investigates aspects that can be adjusted every day to improve farm efficiency. Aspects describing each of the considered managerial practices are regressed on farm level data envelopment efficiency scores based on farm level data from Sweden. The results show that changes in breeding and feeding practices can lead to improved efficiency. Breeding exactly the number of heifers that is needed for replacement of the dairy cows negatively affects long-run technical efficiency. On the other hand, analyzing forage positively affects long-run allocative efficiency and analyzing fodder grain positively affects short-run economic efficiency. Feeding the cows hay instead of only silage, reduces long-run economic efficiency. No significant effects of animal health practices were found. These results suggest that the farms in the sample are homogeneous in terms of animal health practices and that inefficient farms cannot become more efficient by adapting to the animal health practices of more efficient farms.